Jurnal Umum
The Relation Between Voluntary Disclosure and Financial Reporting: Evidence from Synthetic Leases
I investigate how the use and voluntary disclosure of synthetic leases is
affected by incentives to defer cash outflows and manage the financial statements
by keeping debt off the balance sheet. I find that managers of cashconstrained
firms with incentives to defer cash payments are more likely to
finance asset purchases with synthetic leases. Themandated reporting for synthetic
leases allows managers to avoid disclosing the financial consequences
of these transactions. Managers of firms with incentives to use off-balancesheet
financing do not provide transparent disclosure about their synthetic
leases. However, managers of cash-constrained firms, which are less likely to
use synthetic leases for financial reporting reasons, do voluntarily disclose
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